Banking on Millennials?

I’m in Newport Beach, California where I just presented at Moss Adams’ 15th annual Community Banking conference. In tandem with Bank Director’s Publisher, Kelsey Weaver, we focused our remarks on the intersection of fintech companies with traditional banks — and how partnerships potentially position community banks to better serve millennials.

By Al Dominick // @aldominick

In our recent “talent-focused” digital issue of Bank Director magazine, we reminded readers that “as baby boomers retire and Generation X enters middle age, it’s not surprising that top executives and boards are turning an eye more aggressively toward seeding their banks for the future. But, when it comes to recruiting and retaining younger people, banks have a bit of a public relations problem.” This opinion formed the early foundation for today’s presentation — one that allowed Kelsey and me to share our thoughts on how and where bankers might invest in a generation consisting of 75 million Americans. Without re-creating our hour-long remarks, here are three of the points I hope stood out to attendees:

Loyalty < Price. In classic economic terms, banking is a mature industry (that is, an industry in which price carries the day over any other offering). Interestingly, many community banks tout their interests and ability to compete with larger institutions based on their customer service models. However, the expectations of consumers (be it individual or business) have changed to reflect an “always-on, always available” mindset that does not line up with how many community banks operate.

You’re not alone. I mentioned the San Francisco 49ers were recently featured in the Wall Street Journal — not for football purposes; rather, to show how the franchise has taken steps to better engage with their millennial employee base. As I shared, the team’s challenge to “relate to a generation — generally described as 18-to-34-year-olds — that has been raised on smartphones and instant information” parallels that of most banks in the U.S. I promised attendees I’d post the link to the piece I wrote that features the Journal’s report… Promise fulfilled.

There are Friendly Fintech looking for you. Competition comes in many shapes and forms and I believe that banks are acting too slowly when it comes to digital transformations and offerings. Yes, there are truly disruptive fintech companies that have zero interest in aligning with traditional financial institutions. However, there are quite a few that have built platforms that engage with consumers (both individual and business) that want to support banks as part of a mutually beneficial relationship. In our presentation, one of the key pieces is a look at who is friendly to banks in the fintech space (juxtaposed with those that are obviously competitive). If you’re interested, here is a link to the PDF version: Moss Adams 2015 presentation by Bank Director.

Separate from our presentation, let me encourage readers interested in building customer loyalty to check out the work of James Kane. He opened the conference yesterday morning by presenting “The Loyalty Switch: How to Make Anyone Loyal to You, Your Team, and Your Bank.” A smart speaker with an even smarter message. Finally, thanks to our friends at Moss Adams for inviting our participation and the audience of CEOs, CFOs, Controllers, Internal Auditors, and Audit Committee Members from banks here on the west coast. A privilege to share our perspectives with all of you this afternoon.